Indian govt has no intention to restrict import of goods and commodities

The Reserve Bank of India has taken a decision to allow invoicing, payment and settlement of export dues in Indian currency with its trading partners.



Reuters file photo
Reuters file photo

By H. P. Ranina

Published: Sat 23 Jul 2022, 7:28 PM

Last updated: Sat 23 Jul 2022, 7:29 PM

The trade deficit in India has widened during recent months. Is there any move to curtail or restrict imports with a view to meet this challenge?

The Indian government has made it clear that it has no intention to restrict import of goods and commodities into India. The Reserve Bank of India has taken a decision to allow invoicing, payment and settlement of export dues in Indian currency with its trading partners. This is part of the larger strategy to respond speedily to the changing economic and geopolitical situation. The decision to use the rupee for trade among its partners has been taken in response to certain foreign countries tightening their monetary policies. Officials believe that this will help India’s trading partners to get a fair value for the rupee during a period of uncertainty, given that India has macro-economic stability and has been able to keep its fuel costs in check as a result of getting oil and other commodity imports at lower than market prices.

Senior citizens and fixed income earners are not getting enough return on bank deposits. This is despite the Reserve Bank increasing the rates. Is there any alternate form of investment which would give better yields than bank deposits?

The reason why banks are not increasing their interest rates on fixed deposits is that they are currently flushed with large amount of funds flowing in every day. Therefore, senior citizens and fixed income earners may consider investing in high yielding bonds. Yields on bonds are market driven and are currently giving a much higher return than bank deposits. For example, tax free bonds with seven year residual maturity are giving a tax-adjusted yield of nearly 8 per cent as compared to around 5.per cent per cent which senior citizens get from fixed deposits in banks. The bonds also provide a high level of security as Government securities carry a sovereign rating. Further, G-Secs have wider acceptance as collateral while taking loans. Government bonds, being risk free investments, ensure that proper portfolio diversification is made by the investor, which strategy should continue for a longer period of time.

My sister in India is going through a difficult legal battle after she divorced her husband. He has not been paying her maintenance allowance as was decided by the Court. Is it possible for her ex-husband to reduce the quantum of allowance?

Courts in India have taken a practical view by stating that the maintenance allowance, which is called alimony, payable to the ex-wife is not a blanket liability for all times and can be increased or decreased on account of change in circumstances of the husband or the wife. The Delhi High Court has held that the purpose of granting alimony at the time of divorce is not to punish any spouse but to ensure that the dependent ex-spouse is not reduced to penury on account of failure of the marriage. In this case, the ex-wife had made an application to the Court seeking enhancement of the alimony to be paid by her former husband. Under Indian law, change of circumstances is a material factor to determine whether the alimony fixed earlier can be increased or reduced. Reduction in alimony can be made having regard to the changing circumstances like the income of the ex-husband which may have reduced or dried up due to his losing a job or being forced to accept a reduced salary. Courts would take into account the financial capacity of the ex-husband by considering his actual income, and would take into account reasonable expenses which would be necessary for his own maintenance as well as that of his dependant family members, including his own parents.

H. P. Ranina is a practicing lawyer, specializing in tax and exchange management laws of India. Views expressed are his own and do not reflect the newspaper’s policy


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